This paper aims to examine the relationship between family firm generation, performance and entrepreneurial orientation (EO) in investments in sustainability initiatives. The objective of this research is to establish EO as an important antecedent of investments in sustainability initiatives, assess EO’s interaction with firm performance and establish that later-generation family firms are more environmentally and socially responsible.
Data were collected in-person from 151 top managers in automobile and motorcycle dealerships in the southwestern USA. Regression analysis was utilized to analyze the hypothesized relationships.
EO is significantly and positively related to investments in sustainability initiatives. That relationship is dependent on the performance of the firm. At low levels of EO, high-performing firms invest significantly more in sustainability initiatives. However, at high levels of EO, low-performing firms invest slightly more in sustainability initiatives. The generation of the family business is moderately related to sustainability investments, with later-generation family firms investing more.
The findings herein bridge the gap between the entrepreneurship and sustainability literature by establishing EO as an important antecedent of corporate responsibility. Further, the results indicate that firm mechanisms such as EO are more important than the performance of the firm or slack resources available.
